Brands can afford to be creative this Christmas

Christmas is just around the corner and the outlook for the retail sector is decidedly chilly. But despite the pressure on household budgets I want to see brands give the relentless price message a rest and spread a little joy in their festive campaigns.

I’ve tried to delay writing about predictions for retail performance this Christmas but there have been cards and mince pies in stores since September and I imagine that the first wave of Christmas advertising will hit screens this weekend, so why not start now.

Spending this festive season is set to increase 1% compared to last year to £69.09bn, according to research by shopping comparison site Kelkoo and the Centre for Retail Research.

UK consumers will spend £680m more than they did last year and any increase in spending will provide a fillip in the face of a struggling economy, but that 1% is modest when compared to the 3.2% year on year growth reported last Christmas.

Unsurprisingly, the majority of forecast uplift is going to be online and predictions are that online sales will grow 16.3% this year to £13.43bn while offline sales fall by 2.1% to £55.66bn. Again though, online growth, while firmly in the right direction, is just half the rate of growth (32%) reported last year.

Meanwhile, separate research from YouGov found that a quarter of shoppers plan to spend less on gifts this year, and that we are downgrading our “wish lists” from expensive tech items like laptops and cameras, to more affordable things like DVDs.

Traditionally, shoppers splash out on food and drink at Christmas trading up to brands or luxury own brands, but the YouGov study also found that 16% of households are planning to scale back food shopping this year.

So it sounds like good news for HMV, but less good for supermarkets and the likes of Dixons.

Considering that the festive trading season can account for up to 18% of annual sales and up to 50% of annual profits, retailers and consumer brands will have to be very creative with their advertising this year to get shoppers to shop with them, whatever the platform.

Many will be hoping to take advantage of the lucrative X-Factor advertising slots to steal a march on the competition and capture their imaginations.

Morrisons’ “comedy” ad campaign is set to launch at the start of November, as is John Lewis’ festive offering, which if recent campaigns are anything to go by will have the nation gripped in some form of collective feel-good nostalgia that makes us all want to rush out to john Lewis immediately.

Luckily, YouGov also found that 50% of people end up spending more than they intended at Christmas despite the demands on budgets, which means there is room for a bit more creativity in Christmas advertising to capture the imagination rather than keeping up the price-led repertoire that is constant the rest of the year.